Abstract:

With the development of e-commerce and the growing awareness of consumer traceability， it is common for suppliers to encroach on the market and improve product traceability to increase their profits. In addition market demand is uncertain，the retailer can obtain a signal and predict demand. Retailers can influence the above two operational strategies of suppliers through information sharing strategies. The impact of supplier encroachment on retailers is also more complex when considering product traceability.The following research questions are addressed. Faced with the threat of suppliers' potential market encroachment and traceability investment strategy， should retailers share demand forecast information with upstream suppliers， or under what circumstances should they share demand forecast information？ How will retailers' information sharing strategies affect suppliers' channel selection and traceability investment strategies？Aims to explore the interaction between the strategies of supply chain members， a two-echelon supply chain composed of a supplier and a retailer is considered as the research object， and the influence between retailer's demand forecast information sharing strategy， supplier’s market encroachment and product traceability investment strategy under uncertain demand information are analyzed. In the first stage， retailers decide whether to share the demand forecast information with suppliers before obtaining the demand forecast information. In the second stage， the supplier decides the level of product traceability and whether to encroach on the market. In the third stage， retailers obtain the demand information and follow the agreement in the first stage to share or not share the demand information. In the fourth stage， the supplier decides the wholesale price of the product. Finally， if the supplier encroaches on the market， the supplier and the retailer determine the quantity of their own sales channels at the same time， else only the retailer determines the number of distribution channels. There are four decision-making scenarios based on whether the retailer shares demand information and whether the supplier encroaches on the market， by comparing the equilibrium strategies and results under these scenarios.Some key findings are proposed. The supplier’s encroachment strategy is affected by the operating cost of direct channel and the retailer’s information sharing strategy， while the retailer’s information sharing strategy depends on the product traceability cost and the degree of competition between channels. In addition， the supplier’s encroachment strategy does not always impair the retailer’s revenue. When the product traceability cost and the degree of competition between channels meet certain conditions， the supplier's encroachment can increase the retailer's revenue， and as the accuracy of demand forecasting improves， retailer prefers supplier to encroach on the market， but the possibility of sharing information first decreases and then increases.

Key words: information sharing, channel structure, product traceability, market encroachment, quantity competition